Is Arbitrum the uncrowned king of layer 2 sector?
- Arbitrum saw growth across various fronts on its network.
- Starknet awarded old users by announcing token rewards.
The layer 2 sector has been ripe with competition as new entrants continued to enter the space increasingly. However, some L2 solutions were able to perform better than others.
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Competiton on the rise
For instance, Arbitrum[ARB] outperformed its competitors in the past month and saw improved sentiment last week. This led to a surge in liquidity.
It received a substantial $115.67 million in net deposits over the past week. Due to this Arbitrum surpassed both Optimism and zkSync in terms of inflows. This showed Arbitrum’s strong performance and growing market interest.
The past week showed variations in gas usage across different market sectors on Arbitrum. Derivatives recorded the highest gas consumption at $155.75k.
In second place, infrastructure accounted for $145.41k in gas usage, while decentralized exchanges (DEX) ranked third with $136.00k in gas consumption. These figures revealed sector-specific differences in activity and transaction costs on the Arbitrum network during this period.
Which market sectors on @arbitrum consumed the most gas in the past week?
1⃣ Derivatives, $155.75k
2⃣ Infrastructure, $145.41k
3⃣ Exchanges (DEX), $136.00k pic.twitter.com/Xx6kfSybAF
— Token Terminal (@tokenterminal) October 30, 2023
Looking at DeFi
Due to these factors, Arbitrum remained dominant in the DeFi sector. According to Artemis’ data, Arbitrum outperformed most L2 solutions in terms of TVL.
Additionally, the protocol logged a higher DEX volume than other L2 networks. Networks such as Optimism, zkSync era and Starknet underperformed during this period. However, things may soon change.
Starknet makes its moves
Recently, the Starknet Foundation announced that it would share 50 million STRK tokens with early Starknet community members. These tokens serve as rewards for those who contributed to the growth of the Starknet ecosystem.
The rewards program’s main focus would be on individual contributors, those actively shaping the growth of the Starknet ecosystem. It aims to support not only coders but also those engaged in community support, knowledge sharing, and making the ecosystem more vibrant.
In its initial phase, the program would recognize individuals in various categories, including those who significantly contribute to technical discussions. It would also reward contributors acknowledged by key ecosystem projects, and event organizers. Depending on feedback, a second batch may be considered in the future.
This development could help Starknet gain a much need edge. The allocation of tokens to early community members may inspire new addresses to join Starknet in hopes of another token airdrop. The hype building around Starknet and its tokens could aid the network’s growth even further.
Earlier this year, Arbitrum launched its much-awaited airdrop of its ARB tokens. Due to the hype around this airdrop, the activity around Arbitrum shot up.
Even though activity slightly fell after the addresses were granted their tokens, Arbitrum managed to quickly get back on its feet soon after.
Active users on the network
It is yet to be seen whether Starknet will follow the same road map. Even though the future of Stakrnet is uncertain, at press time, it was seen that activity on the network was soaring.
Artemis’ data indicated that Starknet had gone past Optimism, Arbitrum and the Base network in terms of daily active addresses. It only came in second compared to zkSync Era, which had the highest number of active users at the time of writing.
However, the protocol still hasn’t managed to surpass Arbitrum in terms of the number of transactions on the network.
Realistic or not, here’s ARB’s market cap in BTC terms
It remains to be seen if Starknet will be able to compete with other players in the sector going forward. Another interesting development would be STRK token’s performance. At the time of writing, the STRK token was not published on any specific exchange yet.
Coming to the other tokens, it was seen that both OP and ARB witnessed an uptick over the last few days in terms of price and market cap.